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Cydan, the NEA Startup Machine, Scours the Globe for Orphan Drugs

What if you could create a biotech startup focused on treating a rare disease, with a drug candidate already in hand, and high odds of success in clinical trials?

That’s the concept that crystallized in former MedImmune executive David Mott’s mind through decades of experience in the life sciences sector. The idea ultimately led him to start a Cambridge, MA-based biotech incubator called Cydan. This new organization, formally announced this month, has been staffed with a hand-picked squad of specialists tasked with churning out a lineup of small companies that make drugs for orphan diseases.

Mott (pictured above), now a general partner at life sciences investment firm New Enterprise Associates, pulled together support for the idea from Pfizer Venture investments (the VC arm of New York-based Pfizer) and Alexandria Real Estate Equities to provide $16 million to get Cydan off the ground. That cash allows Cydan’s four-member executive crew to begin its novel quest—establishing itself as a creator of orphan disease startups that are already well positioned to succeed upon their formation. Each startup will attempt to reward investors by either signing lucrative partnerships with pharmaceutical companies or getting bought outright.

“I think it’s a way to help capitalize on the science that’s evolving, to help develop assets that ultimately there’ll be a lot of buyers for, or partners for, since so many Big Pharmas now like this space, and [to] make a big difference for all the patients out there,” Mott says.

Mott plans to make it work by creating an economically efficient, virtual company that has key relationships with not-for-profit, parent and patient advocacy groups, and experience in the drug development and investment communities that give it a leg up in unearthing promising rare disease programs from academia. Cydan won’t do any of the basic discovery or research on those programs, but will instead identify drug candidates, and then either acquire, license, or option the technology from others who have already done much of the basic research. Once the program is in-house, Cydan will map out a series of experiments and then get the work done by outside contractors, who will perform toxicology, pharmacology, and other studies that seek to make the drugs less risky for further development. Those contractors will answer questions such as whether a compound has drug-like properties, if it can be given orally, and what the maximum tolerated dose would be, among other things.

“Those external services have become so much more high quality, available, and cost effective, that I think a virtual company with [about] a half a dozen employees can really quite effectively do drug development across many therapeutic areas by looking for outside sources to do the key experiments,” Mott says.

That 12-month process would, in theory, be an economically efficient way to lower the risk involved in developing a potential worthy rare disease treatment candidate. Once the experiments are … Next Page »